31/05/2011 (Business Standard) - Centre's announcement of allocation of Rs 4.80 crore to Gujarat for increasing oil palm acreage seems to have failed in impressing the industry players and the agriculturists in Gujarat as they see dismal prospects for a fruitful outcome of this initiative by the central government.

Under the ambitious programme of Oil Palm Area Expansion (OPAE), the central government aims to increase the oil palm cultivation in the country by 60,000 hectares during 2011-12, of which 1,000 hectares of land is targeted to be brought under the oil palm cultivation in Gujarat. Currently, oil palm is cultivated on about 171,000 hectares in India, while in Gujarat the area under oil palm is around 2,400 hectares.

However, industry insiders are sceptical about the success of the programme considering the geographical and climatic limitations for oil palm farming in the state. "It is difficult to predict the success of oil palm cultivation in Gujarat, as the state has a large portion of its land falling under the arid region. Traditionally also, there has been very limited oil palm cultivation in Gujarat, mainly in the southern part of the state," said an industry source.

"Since the oil palm cultivation requires high amount of natural rain water, it is best suitable in the states like Andhra Pradesh, Karnataka and Tamil Nadu. But Gujarat doesn't seem to have such prospects for successful oil palm cultivation. The climatic conditions in the state do not seem to support the oil palm cultivation," informed Swapan Datta, deputy director general, crop sciences - Indian Council of Agricultural Research (ICAR).

The industry sees several limitations in commercial cultivation of oil palm that include high initial capital investment, continuous irrigation facility and higher gestation period of about 4-5 years to get the yield.

Meanwhile, agriculture analysts from Gujarat have also raised concerns of a possible impact on the castorseed and groundnut growing farmers. "The move to encourage oil palm cultivation will come as a blow to the castorseed and groundnut growing farmers. They are already reeling under low realisation of their produces due to government's policy of zero import duty on edible oils. The palm oil, being a cheaper option to groundnut oil would add to the troubles of the groundnut growers," said Biren Vakil, a commodity analyst from Ahmedabad.

OPAE, which is being implemented as part of the Central government's Rashtriya Krishi Vikas Yojna (RKVY) has come in the wake of India's heavy dependence on imports to meet its edible oil requirements.

The palm oil constitutes about 80 per cent of the country's total edible oil imports. India's vegetable oil imports have witnessed a sharp rise from 8.18 million tonnes (MT) in 2008-09 to 8.82 MT in 2009-10 (Oil Year runs through November-October).